ORDER
1. On 15-3-1983 P. Parthasarathy, then a Member of our Parliament approached the Andhra Pradesh Industrial Development Corporation Ltd., Hyderabad with a request for financial help to set up an P.C. Cylinder Manufacturing Project at Koduru, Cuddapah Dist. He wrote to the first respondent to sanction term loan. He had, by then, registration in his name from Director General of Technical Development Government of India, New Delhi. Parthasarathy’s request was supported by a project Report prepared by A.P. Industrial Technical Consultancy Organisation regarding the financial viability of the project. Koduru in Cuddapah District is a centrally notified backward area entitled to Central subsidy. In Project Report, Mr. Parthasarathi and his son P. Chandrasekhar were shown to the activators of the project. Basing upon lose materials, the Board of Directors of the first respondent agreed in principle to sanction term loan of Rs.24.14 lakhs under the Industrial Development Bank of India’s refinance Scheme and to participate in equity to an extent of Rs.2.79 lakhs. The first respondent wrote on 4th June, 1983 and on 8th June, 1983, a letter to the writ petitioner M/s. Padmasarathy Cylinders & Forgings (P) Ltd., which was, by then under incorporation. In that letter the first respondent informed the writ petitioner (then under incorporation) that the Board of Directors of the first respondent had decided to sanction a term loan of Rs.24.14 lakhs under the I.D.B.I. refinance Scheme on the terms and conditions mentioned in the annexure to that letter. Among the terms and conditions mentioned in the annexure to that letter, we need to refer only to conditions Nos. 6, 10, : 11-A, 11-B, 13 to 16, 18 to 20,22 to 25,27 and 1,8 which the first respondent now says, had not been fulfilled by the petitioner even to his day. The present allegation of non-fulfillment by the first respondent against the petitioner extends to Conditions Nos. 1 to A 6,9 to 11, 13,15,28,30,31,33 to36,38 and 39 also on 13-11-1984, the first respondent wrote to the writ petitioner informing in that I.D.B.I. had agreed to refinance the loan. Meanwhile the petitioner was registered as a Company under the Companies Act on 16-8-84 with its registered office at Bangalore, Kamataka. To the Memorandum of Association of the company, neither Parthasarathy nor his son Chandrasekhar were parties. Two persons who had subscribed their signatures were Smt. Usha Rani wife of one S. K. Raghu and Smt: Ramadevi wife of one G. Chakrapani Reddy. In the articles of association ~ we find only those two ladies as subscribers. Both of them were unheard of before. On 23-5-1984, the Andhra Pradesh Industrial Infracture Corporation Ltd., wrote a letter to the petitioner-company allotting land for the setting up of the above project at Renigunta and the petitioner had also obtained promise of substantial financial help from the second respondent, the A.P. State Financial Corporation to an extent of Rs.30 lakhs. By 17th April, 1986, the petitioner had also applied to the Company Law Board at Madras to change its registered office from Karnataka to Andhra Pradesh. (It appears that subsequently they had shifted the registered office to Andhra Pradesh). However, the company had never come out of these preliminaries. At any rate, it never came out of them except into this litigation. Now although four years had elapsed from the time the first respondent had agreed to grant the term loan and to participate in the equity of the company to a certain extent, the company never went into commercial or at least trial production so far. All it did was to complete construction of civil works and erection of machinery by 1985. The first respondent on its part did not release the term loan and the equity amount agreed to be released by its letters written on 4-6-1983 and 8-6-1983. On 10th Oct. 1986, the petitioner had issued a registered notice to the first respondent complaining that the petitioner Company had incurred several liabilities for the purpose of implementing the project mg suffered severe detriment by borrowing 30 lakhs of rupees towards equity and 9 lakhs of rupees as unsecured loans and by completing civil construction and by erecting machinery up to 70% all acting upon the promise and faith of the letters written by the first respondent on 4-6-83 and 8-6-1983. The petitioner-company, therefore, called upon the first respondent to release the promised term loan and equity amounts as promised by the first respondent through its letter dt. 4- 5-1983 and threatened with legal action for non-compliance by the first respondent. As the first respondent had failed to respond even to this threat of legal action and to act according to the demand made by the petitioner, the petitioner company has filed this writ petition under Art. 226 of the Constitution for a direction to the first respondent to perform its statutory duty by releasing the loan amount as also the equity participation as per its sanctioned letter dt. 4-6-1983.”
2. To this writ petition in addition to the first respondent, the Andhra Pradesh State Financial Corporation is added as the second respondent while the Director General of Technical Development (Industrial Machinery) Udyog Bhavan, New Delhi is added as the third respondent and the Director of Indian Standards Institution, Nampally, Hyderabad, is added as the fourth respondent.
3.Of them, the first respondent alone appeared and opposed this writ petition. The first respondent has filed a counter-affidavit setting out its grounds of opposition to the grant of relief to the petitioner. Substantially the opposition of the first respondent to the grant of relief is based upon its assertion that the offer of grant of term loan and equity participation contained in its letter dt. 4-6- 1983 was not absolute but conditional and the petitioner faded to fulfil some of those conditions. Failure of Parthasarathy to promote the company is argued to be fatal to the petitioner’s claim. Inasmuch as Parthasarathy did not figure in the promotion of the company the basis of the offer made by the first respondent it was argued had disappeared dissolving the promise to extend financial aid. The second ground of objection raised by the first respondent is that the project was agreed to be financed on its being set up at Koduru, Cuddapah District and not at Renigunta, Chittoor District, where it is now located. Thirdly, the first respondent pleaded that there was inordinate delay from the year 1983 onwards in setting up of the project and that in the changed circumstances, it would not be financially prudent for the first respondent to advance public moneys to start the project now after it had lost all its chances of financial survival and commercial viability. Above all the first respondent argued that under Art. 226 this court should not grant relief of specific performance of an offer made by it and accepted by the petitioner in 1983.
4. Numerous are the documents that have been exhibited in this case as material papers by the parties in their rival attempts to buttress their conflicting claims. On an overview of these materials I find that in this case equity in favour of the petitioner is arguably opposed to equity in favour of the first respondent making the applicability of doctrine of promissory estoppel on which the petitioner relied inappropriate.
5. It cannot be denied by the petitioner company that the promise made by the first respondent to offer term loan and to participate in equity was one made to Parthsarathy and not to Smt. Usha Rani and her associate both of whom are mere name lender and unknown persons to the first respondent. It is a fundamental right of a private creditor and a duty of a public tending body like respondent 1 to examine the credit- worthiness of its debtor. The freedom of the creditor to choose his debtor being normally unqualified and that stranger to a contract lacking contractual right to enforce the obligations under the contract, the petitioner company promoted by the strangers Usha Rani and another who were not parties to the offer of term loan, it is fairly arguable for the first respondent that its offer of 1983 is unenforceable by the petitioner. It is equally arguable that the obligation to grant term loan undertaken by the first./re4pondent in 1983 could not be held enforceable by a company registered in Karnataka and located in Renigunta. Along with its letter dt. 4th June, 1983 and 8th June, 1983 accepting in principle to advance term loan is the first respondent had set certain conditions for the acceptance of the petitioner company. Those terms and conditions set by the first respondent through its letter dt. 8-6-1983 were accepted eight months later on 11-2-1984. As late as January, 1985, the petitioner had not purchased the machinery. Above all, the Petitioner obtained from the first respondent is not objection for the petitioner borrowing from the A. P. State Financial Corporation. The contention of the first respondent that the petitioner company had been dragging its feet all along without showing much progress in the completion of the preliminaries and without going into production is not Unarguable. All I say is that these are triable issues.
6. On the other hand, the petitioner’s argument is that the first respondent has been leafing with the petitioner on the basis that he petitioner was still entitled for the grant of the term loan. The first respondent has been writing , several letters, sending communications to the petitioner even after t was registered in Karnataka and was intended to be located at Renigunta. The Petitioner was submitting progress reports given in the year 1985. On 15-2-1984, the Petitioner paid service charges and commitment charges.
7. The above picture of contradictory pieces of evidence would justify Sir Roger de coverly saying that much can be said on both sides. Remedy of promissory estoppel which was an equitable remedy is not suitable where equities are so nicely balanced. It is a remedy available to correct gross forms of breach of faith. Equity relief will dot be available where he seeker thereof is not pure of heart and action. If his hands are soiled in inequity, his claim cannot be granted. Here the equity in favour of the petitioner appears on an overview to be equally balanced if not over come by the equity in favour of the first respondent’ As fire drives out fire so pity pity and equity equity. At any rate, the clashing claims of the parties are nicely balanced. Above all lapse of time makes the Enforcement of the contract today inequitable. The spirit though not the letter of the international law doctrine of clausvla rebus sic stantibus will have a place in equitable settlements of claims like these even between private parties. In the above circumstances of conflicting equities it does not appear to me to be right for this court to exercise its discretionary writ jurisdiction under Art. 226 of the Constitution and to direct the first respondent to grant a sum of ,money to the petitioner for the purpose of starting a particular project. I think these are all matters better left to be decided by civil courts. I, therefore, decline to interfere in a matter like this and leave the parties free to pursue their remedies in the ordinary course of legal action in civil courts.
8. The cases which have been most relied upon by the learned counsel for the petitioner are, in my opinion, well distinguishable on facts and, therefore, in law. In Lotus Hotel case, , in Godfrey Phihps case, and in Union of India v. M/s. Anglo Afghan Agencies, AIR 1968 SC 718, claims of equity were not opposed to equally strong counterclaims of equity. When such counter claims are made on reasonable grounds, adjudication under Art. 226 in my opinion becomes inappropriate. Doctrine of promissory estoppel is itself the product of equity. Like Solomon’s justice it affords to ignore the equity in favour of the opposite party by taking a myopic view of the petitioners case. Equity does not permit taking a partisan view of the case which is bound to be partial. Considering the facts and circumstances of this case, I cannot say that the defence of the first respondent. does not present a seriously triable issue.
9. The above conclusion of mine would not, in any way, foreclose to the petitioner all avenues of judicial relief nor render him remediless. Article 226 of the Constitution is neither the end nor the beginning of all legal remedies. It is, no doubt, quick and swift and cheap but is ill suited to try issues of controversial and completed factual character. The civil courts are still open to the petitioner. They are the proper forum& All that I say is that the matter is more fit to be adjudicated by civil courts. In Newbury District Council v. Secretary of State, (1980) 1 ALL ER 731 (at p. 7.53) Lord Scarman deprecated the wrong practice of the English Courts introducing into the public administration law concepts of equitable. estoppel which are essentially aids to the doing of justice in private law. That caution is well worth being heeded to. The decisions of the Supreme Court cited by the petitioner are explainable on the basis that the claims in those cases are not based on breach of contract. Lotus Hotel case which is decided on the explicit basis that the respondent/ ending institution owed a statutory duty- to he petitioner Hotel to lend money offers in theory no exception to the above.
10. A. P. I. D. C. is incorporated under the companies Act. It is like any other incorporated company a legal person but without possessing the powers of sovereignty. It is a State only for the purposes of Part III if the Constitution and within the extended, meaning of Art. 12 of the Constitution. The Constitutional injunction to the State not to deny equality before law nor equal protection of laws can in no way be violated by such a body committing a breach of its contract the exercise of power of contract is an exercise of the will of the person and is not a gift of the law. Such power extends to the power to commit breach of such contract without involving commission of any jurisdictional delict. Wrongful contractual breaches can only be repaired by awarding damages. Bending the will of an unwilling person to carry out the obligations of contractual terms is an abnormal remedy and cannot be granted on the basis of Art. 14 of the Constitution. That is the ratio of the decisions of our Supreme Court in Radhakrishna Agarwal’s case, AIR 1977 SC 496 and the very recent judgment of the Supreme Court in the Escorts case, AIR 1986 C 1376. In Escort case Supreme Court rules firmly that commercial transaction should not be considered on the touchstone of k r t. 14. In the earlier decision of Radhakrishna Aggarwal’s case, Beg, C. J. clearly ruled at page 1500 (Para 10) of the judgment, that complaints based on breaches of contract should be, decided by civil action alone.
11. For the above reasons, I dismiss this writ petition but leave the parties to bear heir own costs. Advocate’s fees Rs.250/-.
12. Petition dismissed.